Home insurance, also referred to as “hazard” insurance or “homeowners” insurance, is a kind of property insurance. It covers different types of personal loss, including damages or loss to your home, your home’s contents, or your personal possessions. In addition to covering these losses, it also generally covers accidents caused by or to the homeowner, as long as these accidents happen within the home.
A home insurance policy requires that one of the people covered by an insurance policy actually lives in the home, as well as requiring that they own the home. Landlords insurance and renters insurance are separate types of insurance, if the home is being rented. There are also insurance policies referred to as “dwelling policies,” if some requirement for a home insurance plan isn’t met, such as the home being non-occupied, a secondary residence, or something else.
Home insurance costs can vary pretty widely. The cost paid out, most often on a monthly basis, by the policy holder is called a “premium.” There may be terms other than monthly; the individual policy will outline this. In most cases, it depends on the value of the house itself, and the value of any additionally insured items that are added to the policy. Obviously, a home that would cost more to replace in the case of severe damages is going to be more expensive to insure than a home that is comparatively less costly. Another major consideration is whether the home is likely to be damaged or not. If you live in an area very prone to damaging weather, premiums may be higher than in an area where damage is uncommon. You may also have lower premiums if you have additional features or benefits to your home or location. For instance, living very close to a police or fire station may make crime and fires respectively less likely to be serious. You can also do various home improvements, such as having fire alarms, wind or other weather mitigation measures, or security systems installed. All of these can lower your premium. Additionally, home insurance policies are considered “multiple line” insurance, as they cover both property and liability, so the premiums paid cover both types of damage. In almost all cases, it is not possible to split these types of coverage.
Policies themselves may vary in what they cover. The insurance contract itself will outline what types of damages to the home are and are not covered. Generally things like fire, theft, accident, hail damages, and vandalism will be covered. In many cases, damages due to flooding will not be. If something that isn’t covered by the basic policy (like flooding, severe wind damages, earthquake damage, etc.) is a concern, supplementary insurance policies can often be purchased to cover those types of damage.
Having your home properly insured can save you a lot of money and heartache in the case of something bad happening. You should shop around to find the best policy for you!
